Comments to the FCC on the Future of the Universal Service Fund

The Federal Communications Commission (FCC or Commission) has promulgated a Notice of Inquiry regarding its “report on the options of the Commission for improving its effectiveness in achieving the universal service goals for broadband in light of” the Infrastructure Investment and Jobs Act of 2021. The Information Technology and Innovation Foundation (ITIF) appreciates this opportunity to comment on the Commission’s efforts to ensure universal service.

The Commission’s report is a key moment to take a fresh look at Universal Service Fund (USF) programs in light of major developments in the past several years. Universal service remains a noble goal, and recent expenditures by the government and private sector have made achieving universal broadband service a permanently attainable achievement. Given this and the increasing funding problems associated with USF programs, the FCC should not be content with USF programs that extract perennial multi-billion-dollar sums from consumers and pour them into the pockets of Internet service providers (ISPs). Rather, the Commission should examine how to scale back its programs, especially the High Cost program, and shift to more limited and consumer-targeted assistance.

ITIF’s comments make the following points:

• Recent expenditures are enough to achieve universal service.
• The FCC should sunset its High-Cost Fund programs.
• The Commission should rethink E-Rate around district need.
• Remaining assistance should be given to people in need, not ISPs.
• Remaining USF programs should be funded by the Treasury.

The massive amount of funding now set aside for broadband deployment is the lumpsum investment needed to close the digital divide permanently. There is, therefore, a unique opportunity for the FCC to ensure that the money is used to its maximum potential and achieves the Commission’s universal service goals, while simultaneously slimming down USF to a more targeted, effective, and fiscally stable program that bolsters achievement of universal service rather than impoverishing the very Americans it’s meant to assist.

Read the full comments. (PDF)